How can I keep up with all cost and inventory of materials acquired for handmade items
Ooh, i got experience in this.
I used to make fidget spinners by 3D printing, and sell them, so kind of handmade.
What I did was calculate out cost of all my materials, and how many products I can make one with.
Like if a spool of printing filament costs me $100, and I can make 10 spinners, i note it down $10/spinner. Then I’ll do the same for the bearing (the spinning part), the packaging, the extra other stuffs. If everything comes up to $18/spinner, I know I have to sell upward of $25 and more to make profit. The $18 will be part of my COGS (cost of goods sold) that I use going forward.
You don’t have to be exact, as sometime there are millions of items involved, but the exercise help you gauges how much on average your COGS will be.
Cheers.
Hi @Denysee,
Adding from the GoProfit side, for handmade products, the best approach is to separate material inventory tracking from product profit tracking.
For materials, you may want to keep a simple cost sheet or inventory system showing:
- material purchased,
- total cost,
- quantity received,
- estimated usage per finished item.
Then calculate an average material cost per product and use that as your product COGS.
For example, if $100 of material can make 20 handmade items, your base material cost is $5 per item before adding packaging, labor, fees, or other expenses.
In GoProfit, you can use those product costs to track COGS and profit more clearly. For extra costs that are not tied directly to one product, you can add them as custom expenses. 